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Navigating partnershipsin a crisis Do’s and don’ts for smart partnership leaders
Introduction: Lessons from the roller coasterCHAPTER 1
● In the recession of 2008, it was consumers who
experienced the mindshift. With homes lost and
savings decimated, every penny began to
matter. Coupons,discounts, and loyalty
programs grew in popularity, as did referral
partnerships that promoted them for brands.
● As the COVID-19 pandemic continues to unfold,
these forces have collided. Businesses and
marketing teams are looking for ways to bring in
revenue yet cut costs, while anxious,
house-bound consumers need extra motivation
to spend. Partnerships offer both: a
cost-effective performance-based business
model and the ability to incentivize buying with
deals and loyalty perks.
Although there have been some dark economic days
over the past few decades, none have been darker
than the global pandemic and economic crisis that
began in early 2020, and from which we are still
feeling the effects.
When we look back, in each contraction, we saw
different sectors hit in different ways and businesses
and markets deploy diverse responses. But in each
case, we saw the value of partnerships shine.
Consider this:
● When tech crashed in 2001, a marketing and
business mindshift led brands toward a
little-known channel called affiliate marketing.
With its ability to drive revenue on a
pay-on-performance basis, businesses seeking
low risk and measurable ROI elevated affiliate
marketing to a key channel with new
legitimacy.
Only 23%3 believe content
from celebrities and
influencers is influential
60%3 are much more likely
to trust their close friends
and family
When things go south, brands increasingly lean into partnerships
In the midst and wake of each of these major economic crises and the resulting
belt-tightening, we see an increased reliance on partnerships. In this e-book, you’ll find
out why partnerships are on the rise and how businesses can best leverage and protect
their partnerships during times of financial adversity.
What is it about partnerships that make them a refuge during
uncertainty? Why might you want to put more into your
partnership channel when cash is tight versus pulling
back?
Discover the reasons partnerships have historically
become the go-to channel during volatile times
and some do’s and don’ts for managing
partnerships under duress.
Intr
oduc
tion:
Les
sons
from
the
rolle
r co
aste
r
A crisis in focus: COVID-19
Let’s look at some of the specific business impacts of
the 2020 pandemic and how they have informed
partnership decision-making.
Some businesses are booming:
● Delivery services
● Some retailers
● Online education
● Online entertainment
● Health and wellness
● Subscription services
Some businesses are struggling:
● Travel
● Live events/sports
● Some financial services
● Legacy brick-and-mortar retail
● Nondiscretionary/luxury
● In-location, in-person services (salons, gyms,
ride-sharing transport, etc.)
CHAPTER 2
Only 23%3 believe content
from celebrities and
influencers is influential
60%3 are much more likely
to trust their close friends
and family
Retail challenges
Retailers in particular have seen a unique set of hurdles arise:
5
A c
risi
s in
focu
s: C
OV
ID-1
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Low demand as consumers stay home and focus primarily on a small range of
consumable, remote-workplace, and educational necessities plus products and
services in a few self-care and entertainment categories. But with massive job
losses and unprecedented uncertainty, most are spending as little as possible.
Disrupted global supply chains leave many retailers with little inventory to offer
and/or no way to fulfill orders that do come in. For products they can fulfill,
delivery dates are often so far out that they may end up losing the sale.
Cash flow issues are dire. Most retailers have disaster recovery plans and cash
reserves designed for a single-store or regional event, but not a global public
health crisis of unpredictable duration.
Physical store closures have not only slashed revenue, but many stores are also
stuck with stagnating inventory housed in stores not designed for fulfillment.
That inventory sits idle and aging while brands are desperate for cash.
6
How brands respond
During the pandemic, brands hit the hardest have responded with layoffs, reduced hours,
discretionary cost-cutting, and aggressive tactics to manage cash flow. Many pushed for
longer payment terms from vendors and partners. And any discretionary spending (i.e.,
marketing budgets) that wasn’t delivering immediate ROAS was quickly rerouted.
The impact on partnerships
During the first few months of the COVID-19 crisis, brands with partnership programs
responded in one of two ways.
● Some ducked out. Understandably, some panicked businesses looked anywhere they
could for cost-reduction opportunities, including partnership programs. Some
suspended their partnership programs outright. Others squeezed partners to extend
payment terms or slashed commissions, either as a way to reduce costs or, for
businesses with increased demand, because they saw less incrementality in referrals.
The thought was, why keep rewarding partners for sales that are pouring in anyway?
(Amazon’s severe commission cuts are certainly an extreme example of this type of thinking.*) The problem with these knee-jerk reactions is that they overlooked both
short-term opportunities and long-term consequences. C-suite decision-makers
desperate to make up for offline losses made demands on partnership managers that
were actually counterproductive in terms of immediate revenue, cash flow, and
long-term business health.
https://impact.com/partnerships/what-amazon-associates-can-do-to-avoid-losses-after-massive-commission-cuts/*
A c
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● Others leaned in. Other businesses saw partnerships as a lifeline. With consumers
looking for deals, coupons and loyalty-based incentives and businesses needing
low-risk cash flow, partnerships became the hero. For some brands, partnerships
were the only marketing channel bringing in returns, and CFOs took notice. (See these best practices for creating resilient partnerships during a crisis.**)
What’s more, ramping up coupons and deals in high-demand categories offered a
rare opportunity for online retailers to take market share and customer loyalty away
from Amazon, which is not known for discounting or incentives.
Those who embrace this more strategic view of partnerships during a crisis not only
sustain a low-risk, performance-based revenue stream, they also maintain
relationships that are valuable. However, once damaged, not easily repaired.*** They
also overlooked an all-important difference between partnerships and other
marketing channels. Unlike keywords and display ads, partners are people.
A c
risi
s in
focu
s: C
OV
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https://impact.com/partnerships/6-strategies-for-resilient-partnerships-through-the-coronavirus-crisis/**
https://www.accelerationpartners.com/blog/message-to-cmos-how-you-treat-affiliate-partners-will-have-long-term-repercussions***
1. Do focus on loyalty
Do’s and don’ts for partnership preservationCHAPTER 3
A great brand reputation is a powerful tool for attracting good partners. But if your partnership program doesn’t live
up to that brand, that value is lost. As with customers, how you treat partners and communicate with them,
especially when times are tough, will nurture loyalty.
Partners loyal to your program brand will be more flexible, more creative,
and more likely to stick with you when the chips are down.
The same holds true for customers —
when a partner stays loyal to
customers, those rewards pay off.*
https://www.accelerationpartners.com/blog/message-to-cmos-how-you-t
reat-affiliate-partners-will-have-long-term-repercussions
*
2D
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https://www.accelerationpartners.com/blog/how-to-best-communicate-with-partners-if-pausing-
affiliate-program
*
Don’t be a jerk
Be sensitive, mindful, and transparent, even when you have bad news to share. A curt
one-line email telling a partner you’re pulling the plug is both insensitive and
short-sighted.
An open, thoughtful explanation of your decision, a show of
authentic appreciation and regret, and ideally a personal
phone call are both more humane and more likely to
preserve your relationship for better times.
Most importantly, you leave the door open for
ideas and creative solutions your partner may
have for keeping the partnership operating.
Your phone call handled
with grace and empathy
could turn into an
opportunity.*
10
3D
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and
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Don’t be short-sighted
Cutting commissions too severely or pushing payment terms too far right now will be
damaging to your program’s reputation and relationships.
Think long and hard before
you reduce your payouts.
● If you are in a healthy category that is
seeing strong sales, keeping your
commissions high says you value your
partners. That will pay off down the road
in loyalty.
● If you’re struggling, sustaining
commissions will incentivize partners to
be creative and drive sales. Margins may
be squeezed, but your partners will give
you their all.
5
Don’t be exploitative
In any crisis, you need to strike a careful tone with customers and with partners. Avoid
fear-based language or communications that come across as exploitative. You need to
acknowledge the situation but not appear to exploit it for your own ends.
For example, don’t just throw out a deadline for a publisher
partner to take down links or, worse, imply they should keep
links up for free. Be respectful, give them a runway, and
even walk them through how to disable the links.
(They may offer to leave them as-is.)
Do fight for your budget
That unspent media budget? Don’t just hand
it back over to finance.
Rerouting it into performance-based channels
puts it to work to bring in the incremental sales
your business badly needs. You’ll need to do
some educating, but stand your ground.*
4D
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and
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https://www.accelerationpartners.com/blog/why-fixed-budget-for-affiliate-marketing-
makes-zero-sense
*
7
Do shift budget from in-store to online
Use your partnerships to reroute offline shoppers to your online outlets. Partners with
geotargeting capabilities can help capture sales from consumers close to shuttered
storefronts or promote curbside pickup options.
Your deep discount partners are your ticket to converting idle
in-store inventory into cash (see #8).
Do push hot products
Use your partners to elevate the categories
consumers need most. Move those products to
the front of your site even if they are not your
usual sweet spot.
If inventory is low, use your partners to start
first-come waiting lists (you may not have to
pay commission until you ship).
Capture demand and market
share while you can.
6D
o’s
and
don’
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Do liquidate brick-and-mortar inventory
Aging inventory stuck in closed stores is money left on the table. Deal-oriented partners
can be very effective at moving shut-in inventory out of your stores.* Even if you are
selling at or below cost, cash is cash, and last-seasons SKUs won’t move any faster next
year.
Call on those discount sites that specialize in moving inventory fast to consumers
looking for bargains. Your CFO will thank you.
Do provide a reason to spend today
When customers are being deliberate with every dollar, you’ll need to provide a reason
to spend now versus later. Use your content partners and deal-based partners alike to
promote coded discounts, free shipping, flash sales, limited-time offers, and double
points to encourage buying.
Also consider flexible policies like extended, no-risk
returns that let consumers buy or book now with
freedom to return or cancel later without penalty.
8D
o’s
and
don’
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13https://www.accelerationpartners.com/blog/brands-facing-unwanted-inventory-affiliate-marketing-is-solution*
10D
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Do create your own opportunities
While instinct may tell you (and your finance
team) to crawl back into your shell and avoid
risk at all cost, a crisis may actually be the ideal
time to try something new or test a fresh idea.
Nothing ventured, nothing
gained — look for ways to
make your own good news.14
Do embrace your community
When communities are in need, establishing social-good partnerships can help
nonprofits or small businesses stay afloat, and it can provide your customers with a
reason to buy. And it goes both ways.
A crisis may be the time that the relationships you’ve built with partners and consumers
see you through. If you show understanding, communicate with empathy, and maintain
the values of your brand in how you deal with partners, they may just generate creative
ways to support your business.
11
● Pick up the phone to communicate with partners. Any given conversation might
lead to an innovative win-win solution.
● Deliver non-monetary value. Fast payment can be a huge value to smaller
partners with tight cash flow. Consider negotiating lower commissions by
guaranteeing faster payouts. Remember, a missed payment may be seen as a red
flag that you are going under, and your partners may scatter. But faster payments,
even if reduced, send a signal that you are firmly in the game.
● Consider increasing commissions — even for a day or two. More money in might
mean more out as motivated partners put the pedal to the metal. Plus, the optics
are pretty powerful for your brand.
● Renegotiate fixed fees. Your fixed-fee partners might be open to new CPA terms,
especially if the alternative is curtailment. It doesn’t hurt to ask (nicely).
● Explore brand-to-brand partnerships. That struggling travel site might be open to
promoting staycation supplies like wine delivery or streaming services. Business
for you can mean needed cash for a complementary brand.
● Get bullish. Partnerships are proven revenue drivers, so a downturn may be the
time to go all-in. Why not negotiate a run-of-site deal with a publisher at a
discount or ask your large partners where they think investment would pay off? If
your partners see you’re not cutting commissions or pushing payment terms like
other brands are, you can bet they will have great ideas for driving volume.
Do’
s an
d do
n’ts
for
part
ners
hip
pres
erva
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15
Do create your own opportunities (con’t)11
16
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Do plan ahead for the upswing
Create your reopen plan well before you need
it. Historical data indicates that the most gains
are made at about point #3 in this U-shaped
crisis model and that #4 is too late to catch the
rebound.
Plan ahead, and bring your
partners into that plan, so you
can hit the ground running
together.
The heart of the matter: Keywords don’t have feelings
Search campaigns and programmatic media buys can be stopped and started on a
dime. But partnerships are relationships with other human beings. The rules are
different, but so is the potential for creative, collaborative, and compassionate
problem-solving when things get tough.
Impact created this ebook in partnership with Acceleration Partners as part of a webinar
series. (See the webinar here.) Check out Impact.com and AccelerationPartners.com for
more timely resources to help develop your company’s partnership channel to its full
potential.
About Impact and Acceleration Partners
17
Impact is transforming the way
enterprises manage and optimize all
types of partnerships. Impact’s
Partnership CloudTM is an integrated
end-to-end solution for managing and
growing an enterprise’s partnerships
across the entire partner life cycle in
the emerging partnership economy.
To learn more, reach out to us at
[email protected] or find out more at
impact.com.
Acceleration Partners is the premier
global partner marketing agency. By
focusing on Better People, Better
Process, and Better Performance, our
team sets the standard for how brands
efficiently grow and refine their
marketing partnerships anywhere in
the world.
To learn more, please visit
https://www.accelerationpartners.com
or reach out to us at
About Partnership Cloud
Impact’s Partnership CloudTM provides an integrated,
end-to-end solution for managing all of an enterprise’s
partnerships throughout the world.
From discovery, recruitment, and contracting to tracking,
protecting, and optimizing — through the entire partner
life cycle — the Partnership Cloud helps you drive
revenue growth from every type of partner, including
traditional affiliates, influencers, strategic partners,
app-to-app partners, premium publishers, and more.
To learn more, please visit
https://impact.com/partnership-cloud/ or contact
[email protected] to schedule a free demo.
© 2020 Impact Tech, Inc. All rights reserved.
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